A bigger Voice for Small Business

Stimulus Bill Spending Shuts Out Small Business

by | Feb 18, 2009 | Press Release

Press Release

Stimulus Bill Spending Shuts Out Small Business

February 18, 2009

Petaluma, Calif. - President Barack Obama's stimulus bill offers $499 billion in new government spending. The bill contains no specific provisions to direct even one dollar of those funds to America's 26 million small businesses.

According to the most recent data from the U.S. Census Bureau, firms with less than 20 employees account for over 90 percent of all American businesses and are responsible for more than 97 percent of all new jobs. These small businesses also employ over 50 percent of all private sector workers. (https://www.asbl.com/documents/INKSBAReport.pdf) Inc.com and CNNMoney.com released stories on the findings. (http://www.inc.com/news/articles/200708/data.html, http://money.cnn.com/2008/07/30/smallbusiness/job_creation.fsb/index.htm) 

Since the purpose of the stimulus bill is job creation, small business owners and advocates are puzzled as to why the bill virtually ignores the very firms that create 97 percent of all new jobs.

In addition to being shut out of the new economic stimulus bill, federal investigations have uncovered that small businesses are not receiving the minimum 23 percent of federal contracts as required by existing federal law. 

According to a series of more than 15 federal investigations that have been released over the last seven years, the vast majority of contracts the Small Business Administration (SBA) reported as going to small businesses actually went to Fortune 500 firms and hundreds of other clearly large businesses around the world. (https://www.asbl.com/documentlibrary.html) 

As much as $100 billion a year in federal small business contracts have been diverted by the SBA and federal contracting officials to firms such as Xerox, Wal-Mart, Microsoft, Home Depot, Halliburton, Raytheon and General Dynamics.  Federal contracting officials have even diverted U.S. government small business contracts to some of Europe's largest corporate giants. Rolls-Royce and British Aerospace (BAE) have received hundreds of millions of dollars in government small business contracts along with French defense contractor Thales Communications and Dutch conglomerate Buhrmann NV, which is headquartered in Amsterdam with thousands of employees worldwide.

As early as February of 2008, President Obama recognized the damage diverting government small business contracts was having on the national economy when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php) 

Since making that statement almost a year ago, President Obama has not proposed any policies to make good on his campaign promise. Without legislation to stop it, the middle class economy will continue to suffer, as over $400 million a day in government small business contracts continue to be diverted from American small businesses.

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Stimulus Act - A Small Impact on Small Business Owners and Even Smaller for Women in Business

by | Feb 18, 2009 | ASBL News

News

Stimulus Act - A Small Impact on Small Business Owners and Even Smaller for Women in Business

By Lahle Wolfe
About.com
February 18, 2009

According to the Small Business Administration (SBA), only $730 million out of the $787 billion economic stimulus package (not even 1% of the spending) is being spent to stimulate small businesses. How? By "enhancing" loan access.

Jan Norman (OC Register) reports: "The benefits for small-business borrowers are a reduction in loan fees, higher guarantees in some cases and incentives to encourage the secondary market, which experts say is the real problem." But I am not impressed with the "solution." Of the $730 million the SBA is only allocating $375 million for these "benefits."

While SBA Administrator Darryl K. Hairston believes that this will "truly help small-business owners affected by the crunch," when I look at where the SBA is proposing to allocate the $730 million, I remain skeptical that the impact will be significant - especially for women-owned businesses:

  • $20 million for technology systems to streamline the SBA’s lending and oversight
  • $15 million to expand the SBA’s Surety Bond Guarantee program for builders (not much going to women there!)
  • $25 million for jobs to meet new-program demands
  • $10 million for the Office of Inspector General

$30 million will go towards expanding the SBA's microloan program. This may sound great on the surface because most of the microloans (loans less than $35,000) go to low-income individuals, minorities, and women, but the SBA has also said that some of this $30 million will actually go towards "technical assistance to help owners learn to run their businesses successfully." In other words, the SBA has not said how much of the $30 million is even going for loans.

The American Small Business League in Petaluma points out the American Recovery and Reinvestment Act does not require that any of the billions of dollars in contracts be awarded to America’s 26 million small businesses, and as for women and minority business owners, they will certainly get the smallest share of any small business contracts awarded.

Source:  http://womeninbusiness.about.com

Entrepreneurs Not Feeling Stimulated

by | Feb 18, 2009 | ASBL News

News

Entrepreneurs Not Feeling Stimulated

By Dennis Romero
Entrepreneur.com
February 18, 2009

The $787 billion economic stimulus package signed into law by President Barack Obama this week contains $116 billion in tax cuts for individuals, more than $53 billion for education and job training, and north of $10 billion for health, science and research.

But there's nary a penny explicitly set aside for startups and entrepreneurs. In fact, the closest you'll come to finding a any such stimulus is the package's extension of an existing small-business deduction that allows owners to write off $250,000--double the amount set in 2007--worth of office equipment, manufacturing gear and vehicles.

To advocates who say American small businesses employ and create the majority of job positions nationwide, the stimulus is more of a drag--and is possibly even short-sighted.
 
During his campaign last year, Obama acknowledged the economic power of entrepreneurs, promised to boost small business owners, and proposed to seed new business incubators with $250 million in federal funds. "Small businesses employ half of the workers in the private sector in this country and account for the majority of the job growth," he acknowledged at a campaign stop in October.

At the time Obama had just released his "Small Business Emergency Rescue Plan" (PDF) and called for the U.S. Small Business Administration to administer more loans through its disaster lending program. But so far, he hasn't walked the walk, observers say.

Bill Rys, tax counsel for the National Federation of Independent Business, says even the stimulus bill's main lifeline to entrepreneurs--its Section 179 business gear deductions--could be of limited value at a time when owners are cutting their equipment expenses. "We're seeing those types of investments really slowing down," he says.

"We certainly would have liked to have seen more provisions directly targeted to small business, especially mom-and-pop operations," he says. "There's little in the bill that speaks directly to them."

Job creation is a key to economic recovery, and there's little in the package that will inspire the nation's biggest employment sector--smaller businesses--to hire, argues American Small Business League president Lloyd Chapman. "A stimulus bill with no provision for companies that create most new jobs," he says. "That's a problem."

The bill does put billions of dollars into repairing and upgrading infrastructure such as roads and bridges, and related projects will likely trickle down to some smaller contractors. And its tax provisions will give individuals, including most average entrepreneurs, more than $100 billion in total breaks. But Chapman maintains that the stimulus is "insignificant" when it comes to small business.

"Most Americans work for small businesses," he says. "We must protect this great resource."




Source:  http://blog.entrepreneur.com/2009/02/entrepreneurs-not-feeling-stimulated.php

Small Business Administration Moves Forward in Federal Lawsuit to Withhold Contracting Data

by | Feb 17, 2009 | Press Release

Press Release

Small Business Administration Moves Forward in Federal Lawsuit to Withhold Contracting Data

February 17, 2009

Petaluma, Calif. - Despite President Obama's promise of increased transparency in government, the Small Business Administration (SBA) is moving ahead with its appeal of a San Francisco District Court ruling directing it to release small business contracting data to the American Small Business League (ASBL). The 9th Circuit Court of Appeals will now hear the case.  The SBA must file its appellate brief with the court by March 20.

Under the Freedom of Information Act (FOIA), the ASBL requested the names of all firms that had received federal small business contracts during fiscal years (FY) 2005 and 2006. During proceedings in United States District Court, Northern District of California, SBA attorneys attempted to convince United States District Judge Marilyn H. Patel that the agency did not possess any information on the actual recipients of federal small business contracts.                  

Patel rejected the SBA's excuse in her ruling in favor of the ASBL stating, "The court finds curious the SBA's argument that it does not 'control' the very information it needs to carry out its duties and functions."
(www.asbl.com/documents/26-2.pdf) 

The ASBL has won a series of FOIA cases against the SBA, NASA and the Pentagon, which have proven that the SBA dramatically inflated government small business contracting statistics. The information indicated that billions of dollars in contracts the SBA reported as going to small businesses had been diverted to Fortune 500 firms, their subsidiaries and thousands of other large businesses in United States and even Europe.

Since 2003, over a dozen federal investigations have found widespread fraud and abuse in virtually every small business program administered by the SBA. Several investigations found large businesses had received federal small business contracts fraudulently through "false certifications," "improper certifications" and "vendor deception."
(http://www.sba.gov/IG/05-16.pdf) 

In Report 5-14, the SBA's own Office of Inspector General found the SBA had reported contracts to several large businesses as small business awards, including Dutch conglomerate Buhrmann NV with more than 26,000 employees worldwide. (http://www.sba.gov/IG/05-14.pdf) 

SBA Press Office Director Mike Stamler has managed an extensive SBA media campaign to portray the billions of dollars in fraud and abuse in federal small business contracting programs as a "myth." (www.asbl.com/documents/sbamythvfact.pdf) With the help of several journalists, the ASBL has obtained evidence indicating Stamler has also made libelous and slanderous statements about the ASBL.

The ASBL is preparing to file another FOIA lawsuit against the SBA for refusing to comply with a FOIA request for e-mails Stamler sent members of the press in an attempt to slander ASBL President Lloyd Chapman.

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